Delayed Graduation and Overeducation in Italy: A Test of the Human Capital Model Versus the Screening Hypothesis
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Delayed Graduation and Overeducation in Italy: A Test of the Human Capital Model Versus the Screening Hypothesis Carmen Aina1,2 · Francesco Pastore2,3,4 Accepted: 16 July 2020 © The Author(s) 2020
Abstract Exploiting the human capital versus screening hypothesis frameworks, this paper studies the link between delayed graduation and overeducation, and their effect on wages, by using the ISFOL-Plus data. The evidence lines towards predictions based on the signalling model. However, as to the determinants of overeducation the coefficient of delayed graduation is significant only for delays of 3 years or more and also controlling for the entire set of covariates. This suggests that delay conveys a signal of low skill. Keywords Delayed graduation · Overeducation · Human capital theory · Screening hypothesis · Earnings equations JEL Classification C25 · C26 · C33 · I2 · J13 · J24
1 Introduction Delayed graduation is spreading worldwide, from the United States to Europe, especially Germany, France, Denmark and Sweden (Häkkinen and Uusitalo 2003; Van Ours and Ridder 2003; Brunello and Winter-Ebmer 2003; Bowen et al. 2009; Bound et al. 2010). It is hence a cause of concern for academicians, policy makers and practitioners at all levels, as it may generate important consequences on the individual, such as psychological distress as well as negative effects on several labor market outcomes, such as employment Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1120 5-020-02446-0) contains supplementary material, which is available to authorized users. * Francesco Pastore [email protected] Carmen Aina [email protected] 1
Università del Piemonte Orientale, Via Perrone 18, Novara, Italy
2
Global Labor Organization, Maastricht, The Netherlands
3
Faculty of Economics, Università della Campania Luigi Vanvitelli, Corso Gran Priorato di Malta, 81043 Capua, CE, Italy
4
IZA (Institute of Labor Economics) of Bonn, Bonn, Germany
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C. Aina, F. Pastore
and wages (see, among others, Brodaty et al. 2008; and Gary-Bobo et al. 2016; Witteveen and Attewell 2019). It may also lead to later start of career trajectories and foregone tax revenues for the State. In the long run, it may lead to decreasing enrolment rates, especially during economic crisis, when the expected net return of investment in higher education may shrink. Overall, the causes are similar across countries, except for some country specific factors. Italy, the country on which this contribution is focused, is indeed an interesting case study due to its large and persistent share of students that spend more years than the curricular number prescribed to attain their degree. According to data provided by the Italian Ministry of Education, about 40% of students experience some sort of delay. In this respect, a neologism has been introduced for this phenomenon: “fuoricorsismo”. Following the amended human capital model (HCM; e.g. Altonji 1993; for a survey, see Aina et al. 2019;
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